NE1011: Rural Communities, Rural Labor Markets and Public Policy
Statement of Issues and Justification
The future of rural America depends on decisions made by citizens, businesses, in county courthouses, state legislatures, and Congress. While much of the activity is local, many of the challenges and issues are common across the three thousand counties and fifty states. Through formal and informal University and Extension Service planning processes, rural stakeholders have identified four issues important for rural people and places:1: What are the rural opportunities and threats arising from electronic commerce, financial liberalization, other changes to fixed and delivery costs that affect rural economic activity? These and other "market area" issues are redefining rural private and public sector activity in unprecedented ways.
2: What is happening in rural labor markets and what are the causes and impacts of migration on rural communities? Rural people are seeking to understand how to improve labor market outcomes and to better prepare for changes in age structure and ethnicity and other demographic trends that are altering the face of rural America.
3: What effect does public policy have on rural areas and rural industries? Public policy has important impacts on rural people and places.
4: What are the characteristics of a healthy, successful rural community? Rural leaders are seeking to understand how to revitalize their economies, and are looking for models that will help them decide what investments are most effective in improving rural economic well-being.
These four issue areas have been identified as critical to local development initiatives by citizens, rural development practitioners, policy-makers in government agencies, and professional analysts responsible for monitoring and intervening in rural economies.
Successful local development efforts depend on answers to the questions around which we have organized this project.
Objective 1 of the project focuses specifically on rural opportunities in the e-commerce new economy. Mark Drabenstott, Director of the Federal Reserve Bank of Kansas Citys Center for the Study of Rural America, has put e-commerce on top of the new agenda for rural America (Drabenstott, 2000).
Objective 2 focuses on rural citizens in labor markets, taking into account that these often have important links to urban foci. Objectives 2 and 4 examine Drabenstott's hypothesis that high quality rural life is a prerequisite for well-functioning rural labor markets and economies.
Former USDA Undersecretary Karl Stauber (now President of the Northwest Area Foundation) has expressed concerns that today's rural public policy is often urban policy that is poorly modified to fit nonurban settings (pg. 34) Objective 3 explicitly considers new farm bill options emphasizing non-farm rural objectives.
The 5 goals of the USDA Rural Development mission area strategic plan all hinge on improving the quality of life in rural America.(USDA, 2000;, USDA, 2001). Objective 4 explicitly addresses measurement of and policy impacts on, the quality of rural life.
The congruency of these issues identified by citizens and CSREESs goals; ERSs lists of priorities; and the issues addressed by the Federal Reserve Bank of Kansas City Center for Study of Rural America reinforces our motivation to focus on these issues in this multistate research project.
The technical feasibility of this research has been established in previous analyses of global forces and rural economies, rural labor market and migration studies and analyses of rural policy. The research represented in the attached list of publications from the previous NE-162 project establishes much of the empirical and conceptual groundwork for the current project.
Current research is underway on some of these issues, but there is little systematic cross-state collaboration on these four issues. Scientific advances on these topics would help rural community leaders and state and Federal policymakers to design effective strategies for improving economic well-being in rural areas. Collaborators on this project have the technical expertise and experience to make significant progress. The cross-state collaboration stimulated by a multi-state research project will allow us to draw scientific inference from multiple observations, and to capitalize on regional cross-sectional variation to distinguish commonalities or systematic effects from idiosyncratic outcomes. The regional research project also provides a context for comparing case studies and improving the insights we can gain from them.
Local and national leaders can use the results of this research not only to understand the forces affecting them, but also to design strategies for strengthening their economies. The potential of this research to have significant impact is strengthened by the connections of the researchers with the Extension Services of the various states and their educational programs for rural leaders and policymakers.
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